Sage Share Discussion Threads

[maddox] 06/12/2005 16:34

BI2,

Well, turnover of £829m then £879m is equivalent to y-o-y growth of 6.7%, then 6.03%; which is approximately what Sage achieved last year on organic growth alone. So your view appears correct, especially considering that Sage gave a confident opinion on 2006. I think we can look forward to an uptick in acquisition activity so IMHO your 2006 target of 17% growth is a realistic target and 8% for the year after probably too conservative.

Regards, Maddox

[lyntwyn] 02/12/2005 15:22

SGE at 241 today, up 6, already passed Citygroups 12 month target of 240!

30.11.05 :+2.25, (232.25) the group's in-line figures were taken as a sign for investors to take a pause after recent gains and as selected analysts questioned the quality of the numbers, dealers said. The software group posted full year sales of 776.6m and pretax of 205.4m compared with a pre-announced 777m and 204m respectively. Citigroup Smith Barney said it was disappointed that organic revenue growth remained stable at 6%. The broker had hoped for an acceleration to 8%. It also said the number of support contracts has not increased and said UK revenues were slightly lower than the broker's forecasts. The US broker also pointed out that the shares have had a good run since the trading update and now have only a small way to go before reaching the broker's 12 month target of 240 pence. Investec, which has a 'sell' recommendation, said that today's statement shows that growth will be driven by investment in software solutions, which could mean enhanced R&D spend. It also said that the majority of Sage's clients are still small and medium sized enterprises and this is an increasingly competitive market, which both Microsoft and SAP have begun to enter. But others were less cautious and Deutsche Bank, Dresdner KW and CSFB all repeated their positive recommendations and said the market will likely upgrade its forecast for 2006 after these numbers.

[maddox] 01/12/2005 11:02

Quite - I was not surprized to see the initial drop. There is a negative sentiment persisting in some quarters, like Investec, that defies strategic logic or indeed the results delivered. My guess is its a fear of Microsoft, this based on the delusion that MSC is a loved and trusted brand. Whereas its strength is based on monopolistic power that generates negative brand values.

Regards, Maddox

[lyntwyn] 30/11/2005 15:27

Maddox,no I hadn't seen that. Laughable really! The new territories bit was one of the most important points SGE made earlier.Analysts generally have been rather negative about SGE for years, despite being proved wrong on each and every count!
sp turned good now after some early profit taking.

[maddox] 30/11/2005 14:14

On the dividend front Sage have previously stated that they will be bringing down their cover to 3.5x from 4.5x whilst leaving cash for acquisitions. We can thus see dividend growth (up 23% for 2005) continuing for the next couple of years.

Regards, Maddox

[maddox] 30/11/2005 13:17

Lyntwyn,

Did you note the comment from Gareth Evans, an analyst at Investec Securities, quoted by AFX:

'although the Sage results were in line with the most recent trading statement,
it remained cautious about the supplier's future growth rate. "Sage has expanded historically through adding new geographies and applying
the Sage model to acquired businesses... Recent deals (acquisitions) have
focused almost entirely on bolstering existing geographies, which we believe
limits the scope for such margin uplift and may contain growth rates going
forward." '

....he clearly didn't listen to what was being said about expanding into new territories.

Regards, Maddox

[lyntwyn] 30/11/2005 13:02

Don't know why T&G compare SGE with MSY & LOG,- they have nothing in common.
Just shows how little some of these analysts know I suppose!! Just mention software and put them all in the same basket.

I'm still comfortable with my target of 280 for SGE- broader market permitting of course.

[maddox] 30/11/2005 12:58

The trading up-date already provided the top-line figures and so no real surprises. However, there are two optimistic statements to pick out -

"The start to 2006 has been encouraging and we therefore view 2006 with
confidence."

...and the signalling of a more aggressive expanision of the current successful strategy into new territories -

'Walker is keen to buy companies in regions where it does not operate or has little presence, such as Italy and Germany in Europe and also parts of Asia, he added. "In Asian markets, obviously China is of specific interest to us," he said.'

This move is clearly aimed at accelerating revenue and margin growth, that together with a more generous payout policy, offers attractive prospects to investors.

Growth and income = a quality investment.

Regards, Maddox

[miata] 30/11/2005 12:00

Deutsche reiterates buy Sage Group.

Merrill reiterates buy Sage (240p price target).

Panmure reiterates hold Sage Group (raising the target price to 235p from 205p).

Teather & Greenwood reiterates buy Sage Group, which they prefer to Misys, where they have a hold recommendation and LogicaCMG, where they have a sell recommendation.

[lyntwyn] 30/11/2005 09:25

LONDON (AFX) - Business software supplier Sage Group PLC reported strong
full-year results in line with expectations, helped by an expanding customer
base and a string of acquisitions.
The Newcastle-headquartered company, which supplies small and medium-sized
businesses (SMEs), said pretax profit for the year to September 30 rose 13 pct
to 205.4 mln stg from 181.1 mln in the same period a year earlier.
Revenue rose to 14 pct to 776.6 mln stg from 682.6 mln.
The analysts' consensus forecast for pretax profit ranged from 204-207 mln
stg on revenue of between 756-771 mln stg.
Sage's revenue growth rate excluding acquisitions was 6 pct, broadly in line
with analyst expectations.
Sage chief executive Paul Walker said in a statement: "Our organic revenue
growth continues to demonstrate the value of our key assets -- our expanding
customer base of 4.7 mln businesses, our locally-developed software solutions
and our network of 23,000 reseller partners."
"The start to 2006 has been encouraging and we therefore view 2006 with
confidence."
Sage raised its final dividend to 1.95 pence per share from 1.71 pence,
taking the total dividend for the full year to 2.87 pence, a 23 pct increase
from a year earlier.
Sage, which sells back office accounting and customer relationship
management (CRM) software through resellers, said its customer base expanded to
4.7 mln businesses from 4.4 mln last year.
Software revenues excluding acquisitions grew by 6 pct to 290 mln stg, while
software support revenues also grew by 6 pct to 486.6 mln stg.
Sage's main regions -- Europe, the UK and the US -- achieved solid revenue
growth ranging between 5-7 pct.
Over the financial year, Sage spent just over 100 mln stg on acquisitions,
although this was less than the 160 mln stg spent in 2004. Last month the
company bought French software company Adonix SA for 78.4 mln stg, although this
was too late to be included in its full-year results.
Some analysts have speculated that Sage may use some of its cashpile by
doing a share buyback but in an interview with reporters, Walker effectively
ruled this out in the short term.
"We regularly consider share buybacks but in light of our acquisition
strategy, we feel it appropriate to hang on to our firepower," he said.
Sage is keen to buy companies in regions where it does not operate or has
little presence, such as Italy and Germany in Europe and also parts of Asia, he
added.
"In Asian markets, obviously China is of specific interest to us," he said.
Walker said that Sage's CRM business will be a priority as SMEs adopt more
sophisticated software that was previously mainly used by large companies.
He added that the growth in government-backed online tax filing services
also provided new opportunities.
In the past few years, many of the larger software companies have begun to
target the potentially lucrative SME market but Walker insisted that Sage could
offer customers a more tailored service than larger rivals.
"We believe SMEs want to buy local products, with a local flavour, supplied
by local people," he said.
By 8.37 am, Sage shares were down 3-3/4 pence to 226-1/4.
nh/slm/jsa

[lyntwyn] 22/11/2005 13:31

MSFT have tried to compete with SGE for several years. No business in their right mind would switch from SGE to MSFT (would you?), - the former is known for its quality support and the latter not - best thing MSFT could do is buy SGE, though I'd be sorry for SGE clients, but would be good for shareholders pockets! Its the only way MSFT will gets its hands on SGE's business.

[po0h ber] 20/11/2005 20:17

MSFT cound crush them with one little finger

[lyntwyn] 19/11/2005 11:47

Sage Group firmed 3p at 232¾p as Dresdner Kleinwort Wasserstein repeated its 255p target after solid first-quarter figures overnight from Intuit, which competes with the Tyneside software provider through its Quickbooks range. The German broker suggested that Intuit's figures indicate strong demand in the American market for entry-level accounting software, and claimed fears over Sage's exposure to any weakness in the UK economy are overdone.

[lyntwyn] 18/11/2005 14:42

The only way is up for SGE.
I am a long term holder, but have also been a regular trader of it, both ways.
But a risky share to short these days. Can't be relied upon to fall back as was the case at one time.Hence the lack of input on this thread. So the only thing to do is hold. Could see 280/300 in 2006 if the wider market continues to advance moderately. SGE is ahead of the pack imo

[the old in out] 17/11/2005 08:34

Where are all the Sage punters? I am holding at least to the end of the month when the official figures come out. I think we will see very good results which should see a rise in price to ofset the grumpy mms veiw of the last statement.IMHO. Barcays and Capital plus others are buying Sage. What do you think? TIA.

[lyntwyn] 11/11/2005 11:13

SGE still shopping on the continent.

10.11.05 :-0.75, (227) announces that it has agreed to acquire Adonix S.A., a vendor of business management software, based in France, for an enterprise value of £78.4m, to be paid in cash. The acquisition excludes the businesses of Meta 4 and Formula, previously part of the Adonix Group. The acquisition is expected to complete within one week of this announcement, Sage said. Adonix is a vendor of a suite of advanced business management solutions for mid-market businesses, including industry-specific software for real estate and manufacturing. Adonix's revenue for the year ended Dec. 31, 2004 was £42.6m and its operating profit was £9.6m. At Dec. 31, 2004 it had net assets of £12.4m.

[angora7] 10/11/2005 18:39

I've heard a couple of things in the marketplace and am thinking that this might be a good time to get back into Sage, but need to do some background research first. Does anybody on here have any recent brokers reports they can share? TIA

[maddox] 20/10/2005 16:47

Sage should increase the dividend in the results so lets hope that the City responds better to that news.

Regards, Maddox

[puber] 18/10/2005 13:21

It's simply a reverse of yesterday's rise. So overall, the results are what most expected.

[lyntwyn] 18/10/2005 12:03

How can SGE drop 3.3% when it delivers? No results are good enough for the City these days, which does not bode well for the broader market over coming months.

Sage Group 219 down 7-1/2
FY sales, pretax in line with market expectations; Panmure targets 205 pence

[ronjen] 18/10/2005 00:21

From today's market report:

On the broker front, Sage Group jumped to the top of the FTSE 100 leaderboard in late afternoon deals as Citigroup upgraded the software group to 'buy' from 'hold' ahead of tomorrow's full year trading update.

Citigroup said it believes Sage will reveal tomorrow that trading is in line with market expectations of revenues of 767 mln stg and EPS of 11 pence.

Moreover, Citigroup highlighted that current weakness in Sage's share price represents a buying opportunity.

Sage was 8-1/2 higher at 226-1/2.

[lyntwyn] 11/10/2005 14:08

10.10.05 : Deutsche Bank sees a buying opportunity following the recent pullback in the shares. The broker expects a "positive" trading update on October 18 which will underline its "improving organic growth message." It also expects earnings to be in line with its "upper-end estimates." The broker has a 265p price target on the shares.
edit.
14/10/05 Goldman says underperform